What is the ABV Credential?
By: Eli C. Neal
You may notice that some of the 4 Corners accountants have a few acronyms after their names. What do CPA, ABV, and CFF stand for?
CPA stands for Certified Public Accountant;
ABV stands for Accredited in Business Valuation; and
CFF stands for Certified in Financial Forensics.
The CPA credential is typically well known, and I’ll discuss the CFF credential in a future post.
Today, I’d like to provide some context for what the ABV credential signifies, how it is obtained, and why it’s important that your business valuation analyst hold this (or a similar) designation.
ABV licenses are issued by the AICPA (which stands for the American Institute of CPAs and the Association of International Certified Professional Accountants).
Initially, only those with a CPA license could obtain the ABV credential. This was the case when I went through the process of obtaining it in 2016 and 2017.
Recently, however, standards have changed, and there are now pathways for both CPAs and Financial Professionals who are not CPAs.
The requirements to become Accredited in Business Valuation (ABV) are rigorous, which is why it can be an indication that a professional can perform valuation work at a high level. The ABV requirements at the time of this posting include:
Membership: Maintain AICPA membership in good standing.
Education: Maximize valuation knowledge through self-study and live events such as webinars. Candidates are required to complete 75 hours of valuation-related continuing professional development within the five years preceding the ABV application date.
Pass the Exam: Candidates must pass the ABV Exam or one of the other qualifying valuation exams. The ABV exam consists of two parts. Each part is three hours and 15 minutes long with 90 multiple-choice questions and 12 case-study-related questions.
Experience: CPA candidates are required to have obtained at least 1,500 hours of valuation experience in the five years preceding the ABV application date. Valuation professionals without a CPA license must have obtained at least 4,500 hours of valuation experience in the five years preceding the ABV application date.
Ethics: CPA candidates have already passed an ethics course. Non-CPA professionals must also complete training on the AICPA Code of Professional Conduct and Standards Education.
Gaining valuation experience is an important part of qualifying for the ABV credential. In my case, I obtained a significant amount of experience during my time as a business valuation analyst and forensic accountant in Portland, Oregon, before I started 4 Corners.
My experience included performing business valuations for planning (such as acquisitions or sales), tax reporting (such as estate and gifting) and for litigation purposes (such as marital dissolution or shareholder disputes). My valuation experience has also included expert witness testimony in trials, depositions, and arbitrations.
Working with a valuation professional who holds the ABV credential can increase the likelihood that your professional has a breadth of experience, has studied and passed a two-part exam testing their knowledge in the field, is up to date on the latest changes in the business valuation community, and is independent and objective in performing their work.
That said, I’ve come across valuation professionals with wide ranging levels of both competence and integrity. So, I’d recommend considering an ABV credential as a minimum qualification and using reputation and testimonials as a cross-check. We know how important valuation work is to our clients.
4 Corners is located in the Greater Seattle area, serving clients in Seattle, Bellevue, Redmond, and all throughout the Pacific Northwest. If you are an attorney or business owner and believe you could use our help, please give 4 Corners a call at 425.800.4896 or email us; we’ll listen to your situation and help you scope your project.
We’d love to help you.